Report: Trade Retirement, Health Care Cuts for Pay


WASHINGTON -- Troops may be open to substantial cuts in military retirement and health care benefits that could save the Defense Department billions in future personnel costs, according to a new think tank report released Thursday. But any such plan would need to be combined with immediate pay increases and other personnel perks to get the backing of servicemembers, in contrast with the stand-alone cuts proposed by Pentagon planners in recent years.

Researchers said the findings should be a wake-up call for policymakers who consider much of military compensation policy to be untouchable, despite the crippling costs.

The cost of military salaries and benefits per person has increased 46 percent over the last decade. Service officials have warned that without dramatic changes, the rising expense could squeeze funding for training and end strength.

But lawmakers have opposed Pentagon requests to add new fees on health care coverage for military retirees, and veterans groups have lashed out at recent proposals to reduce or delay military retirement benefits for the next generation of veterans.

Todd Harrison, a defense budget studies expert at the Center for Strategic and Budgetary Assessments, said their new findings hint that some of that opposition may be off-base.

“Rising personnel costs are something that the Defense Department and Congress are going to have to deal with,” he said. “But getting better value out of the system is a good idea, regardless of the budget situation.”

The new report -- which includes a survey of more than 1,400 active-duty troops -- shows that young servicemembers value immediate pay raises more than long-term retirement benefits they might never collect. Researchers found little support for performance-based pay increases among troops, but did find backing for small health care fees, even for active-duty servicemembers.

More than 90 percent of the troops surveyed would accept a $40 monthly fee on their retirement health benefits in exchange for nominal pay raises now, potentially saving the military hundreds of dollars per person.

In addition, 80 percent would defer their retirement payouts to age 50 in exchange for a 1 percent pay increase now, saving millions more.

Harrison cautioned that the proposals are not recommendations on pay changes, only an attempt to quantify how much troops value different forms of compensation.

Even before Thursday, veterans groups had expressed serious concerns about the premise of the report, noting that regardless of troops’ opinions, government leaders owe certain protections and benefits to troops for their active-duty sacrifices.

Ryan Gallucci, Veterans of Foreign Wars deputy legislative director, said the results present interesting comparisons but should not be used to form any policy decisions. “We’re only talking about a perceived benefit here.”

But Harrison said the Defense Department should be conducting similar surveys to see how personnel funds can be best spent.

The report also found that troops surveyed highly valued the military exchanges and commissaries, but valued family programs and career counseling far less than what the services are paying for them.

“The goal here should be to get better value for the money being spent,” he said.

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